ISLAMABAD, Sept 12: With the quota regime ending in January 2005 and the ongoing expansion in textile business in the country, Pakistan textile industry offers greater prospects of enhanced trade, particularly with the United States.

"A significant investment of $4 billion has been made in expansion of textile industry during the last three years, and more is expected, putting Pakistan in a strong position to compete in the quote-free regime," Chairman of Pakistan Hosiery Manufacturers Association (PHMA) Dr Khurram Tariq said.

Dr Tariq attributed this growth to macro-economic stability realized through unprecedented business-friendly and conducive investment environment under the leadership of President Gen Pervez Musharraf and the country's economic managers.

He welcomed the elevation of Shaukat Aziz as prime minister, saying, the country's businessmen felt more comfortable, as it would ensure continuity of prudent economic policies which had led to stabilization of the economy.

He said the knitted garments sector had a significant share in the country's textile exports, with annual turn-over of about $1.5 billion. The industry is one of the largest employers in the country.

This sector realized exports of about $1.3 billion during the fiscal year 2003-04 and was targeting to achieve $1.5 billion worth of exports during the current fiscal, he noted.

He, however, added that Pakistan's textile industry including the value-added industries also have some challenges to compete under the global trade regime in terms of quality and standards, changes in laws, regional free trade arrangements etc.

The PHMA chairman also referred to a new Generalized System of Preferences (GPS) scheme, being launched by the European Commission from January 1, 2006, which might effect export competitiveness due to proposed increase in the tariff structure.

To a question, he said, the investors in textile business were at present a little reluctant to put more money, owing to proposed changes in the EU policy like GPS system and some reports that the United States could delay the abolition of quota system.

He said the Trade and Investment Facilitation Agreement (TIFA) signed between Pakistan and the United States was a step forward for increased trade relations between the two countries, adding that "we must strive hard to secure a Free Trade Agreement (FTA) with the US as it would benefit us a lot".

The PHMA chairman said although the commerce ministry was taking up all these issues with the authorities concerned and was engaged in the process of talks, there was a need to adopt a more proactive approach on these issues of vital interest.

He welcomed the creation of the Ministry of Textile Industry and said it would greatly help in focussing on the development, growth and promotion of textile industry, which had about 65 per cent contribution in the country's exports. -APP